The government body that controls the Catholic church in China has said it is investigating the selection of a bishop who cut ties with the group as soon as he was ordained, in an embarrassment to Beijing that could deepen its rift with the Vatican.

Shanghai's auxiliary bishop, Ma Daqin, announced that he was leaving the Catholic Patriotic Association (CPA) at the end of his ordination ceremony on Saturday, saying he wished to devote himself fully to his duties as bishop.

The move marked the biggest public challenge to Beijing's control over the Catholic clergy in years. The Vatican does not recognise the CPA and says the Chinese church should take its orders directly from Rome.

Ma's announcement was greeted with applause by hundreds of worshippers in Shanghai's cathedral of St Ignatius, the seat of one of China's largest, wealthiest and most independent dioceses. He has not been seen since.

The 44-year-old was reportedly being held in isolation at a seminary. The Shanghai diocese said he had applied for, and received, permission to go into retreat beginning on Sunday.

The CPA said it was investigating violations of regulations in the selection of bishops in relation to Saturday's ordination. A spokesman, Yang Yu, declined to provide further details on Thursday, saying to do so "might affect or influence public opinion" amid an ongoing investigation.

The Hong Kong-based Catholic activist Anthony Lam said China's response to Ma's announcement would make reconciliation between the sides even harder, adding that the onus was on Beijing to explain its actions. "Obviously the event will cause problems in the process of normalisation of the China-Vatican relationship," he said.

The government's options in Ma's case appear limited. Barring him from his open episcopal duties could strengthen the status of the underground church that operates alongside the open church in most areas in defiance of government control. Allowing him to operate outside the CPA, however, would amount to a major surrender of authority.

Ma's ordination had marked a notable instance of co-operation between China and the Vatican, which have no formal relations and disagree over who has the right to appoint bishops. China demands it should be allowed to do so independently; the Holy See says only the pope can make such decisions.

In Ma's case, the pope had issued its approval of Beijing's selection of him to take over as auxiliary, giving him day-to-day control over the Shanghai diocese and placing him next in line, after the 96-year-old Shanghai bishop Jin Luxian.

Such agreements had been common, but Beijing has in recent years moved to assert its authority by acting independently. Last Friday it appointed a bishop in the north-eastern city of Harbin who did not have papal approval and was immediately excommunicated by the Vatican.

China has an estimated 8-12 million Catholics, about half of whom worship in underground congregations. The atheistic Communist party ordered Catholics to cut ties with the Holy See in the 1950s, and persecuted the church for years until restoring a degree of religious freedom and freeing imprisoned priests in the late 1970s.